Credit Cards

Why You Absolutely Need a Credit Card

There are many different reasons why you should seriously consider getting a credit card, especially if you are a young person. These days having a credit card isn’t just a good idea, it’s pretty much a necessity.

Improve your Credit History and Score

One of the primary reasons that you should look into getting a credit card as soon as possible is that doing so can actually help improve your credit history and score. If you don’t have any credit history or a low score and want to improve it, a credit card can be an effective solution. By consistently making payments on your credit card on time, you will be able to slowly but surely improve your overall score. A good credit score can mean not having to pay quite as much on insurance products as well as loans, so it is well worth it.

Buying Online

Another reason why you should at least consider applying for a credit card is that it can actually save you money on your purchases. You can get some amazing deals online if you have a credit card. These days more and more people are purchasing things on the internet, and using a credit card to do it can save you a significant amount of money. Many websites require a credit card for you to purchase products from them, which is all the more reason to get one soon.

Emergency Funds

A credit card can also provide you with funds in an emergency when you really need to pay for something important right away. If you absolutely cannot wait to get money for some crucial expense that has suddenly come up, a credit card can be a real life saver. Whether it is a car repair, home repair or even a medical bill, a credit card can provide you with the funds you need in a pinch. A lot of people who have credit cards are glad they got one for this reason alone. The last thing you want is to have some emergency expense and no way of paying for it.

Earn Rewards

You will likely be able to earn various types of rewards just by using your credit card, such as airline miles and other things. The more you use your card, the more rewards points you will get. These rewards can really add up over time, so you will need to keep that in mind when deciding whether or not to apply for a credit card.

A Convenient History of your Purchases

If you aren’t any good at keeping track of all your receipts from purchases you have made, a credit card will provide you with a much easier way to do this. Those who have a credit card will provide you with a detailed summary of your spending each month, so you don’t have to worry about keeping track of this yourself. You can use these records as a way of establishing a monthly budget for yourself, which is very important for a number of reasons. Your credit card company will send you a statement each month with a history of your transactions that you can look over. You can even choose to have this statement sent to you via email.

You don’t have to worry about losing cash

When you have a credit card you won’t need to worry about losing your cash when you are travelling. It’s probably not a good idea to carry around a significant amount of cash with you anyway, which is all the more reason why a credit card is a good idea. If you lose your credit card or get it stolen, you can and should immediately cancel it. This way you won’t have to worry about any person who might find it using it to rack up charges.

Interest-free Money

There is a period of time between when you make a purchase with your credit card and when you pay off your card that you actually earn money, but only if your money is in an interest-bearing account. This is definitely one thing that you will need to remember.

Merchant Protection

One of the great things about buying things with a credit card is that you have merchant protection. If you purchase something with cash and the seller doesn’t come through, you really don’t have any options at all. If you pay with a credit card, you will have recourse to get your money back if the seller scammed you in some way. All you have to do is call the credit card company and dispute the charge. The credit card company will open an investigation and issue you a chargeback if they rule in your favour. Most times you can get your money back if a seller doesn’t come through for you in some way.

Loans

What you should consider before signing up for an Car Loan

There are numerous things that you will need to consider before signing up for an auto loan. The more time you take to consider these things, the better of a deal you will get on the loan you need. Most people who get one of these loans rush into them, and as a result they end up defaulting a short time later. You would be well advised to take the following things under consideration before making a final decision of any kind.

How much you are going to put down

One of the first and most important things that you will need to consider when it comes to getting an auto loan is how much you are going to put down initially. While a lot of car dealers will advertise “no money down” deals, you will almost certainly want to put at least something down for this type of loan. It is worth keeping in mind that the more money you put down initially, the less you will pay in interest overall.

Length of the Loan Term

You should also make sure that you take the time to consider the length of the loan term, because it will be very important for a number of reasons. Auto loan terms have started getting increasingly longer over the years. A longer term will mean lower months payments, but you will also pay more in interest by the end. It is important that the loan term isn’t too long or too short. Make sure that you know exactly what the length of the term is before you sign anything.

Interest Rates

You will find that interest rates on auto loans can very quite a bit. Your credit score will largely determine the rate that you pay. Those who have particularly good credit can typically look forward to a fairly low interest rate. You can still probably get a loan with a low credit score, but you most likely will have a fairly high interest rate to pay. Make sure that you compare interest rates with different lenders until you are able to find the very best deal. In the end you will definitely be glad you took the time to do this research because of how much it will benefit you.

Deferred Payments

In the past you have probably heard car dealerships advertise with the “No payments for six months” pitch before, but you will want to be careful. Chances are you will be accruing interest for the six month period, so you will need to remember that. None of these kinds of deals are without their strings attached. If something you see on a TV ad or hear on the radio sounds too good to be true, it probably is. Make sure that you find out all of the details before accepting any sort of deal with a car dealer or lender.

Direct or Indirect lender?

While it’s true that you can choose to get the loan you need from a bank or credit union (a direct lender), you can also go through the dealer. It is important to remember that going through the dealer for financing might not be the best idea, because the mark-up on the interest rate could cost you hundreds or even thousands of dollars by the end. Your best bet when you are going about getting an auto loan is to go through a direct lender yourself. Sit down with someone at your bank or credit union to discuss getting the auto loan you need. You can also apply for one of these loans from your bank online, making it very easy and simple.

Early Payment Fees

Before you sign anything, you will need to make sure that there aren’t any fees that you’ll be charged for repaying the loan early. As ridiculous as it sounds, a lot of people who pay their loan back ahead of schedule get charged additional fees. You will definitely need to make a point of looking over all the terms and conditions of the loan to make sure you know exactly what it says.

Can you afford to pay it back?

The most basic thing to consider before you take out an auto loan for any amount is to crunch the numbers and see if you can actually afford to make all of your payments on time. The last thing you want is to struggle with making your payments each month, because that will only negatively affect your credit score and history. Make sure that you take all the time you need to figure out if you can afford to make each payment on time every time so you don’t put yourself in a situation where you are defaulting on a loan.

Mortgages

Top Tips for getting a Mortgage in 2017

If you want to get the best possible mortgage in 2017, there are going to be some key things to remember. The more time you take to get this information, the better your loan is likely to be. One of the worst mistakes that you can make is rushing into this type of loan, because you will almost certainly regret it.

You can make a small down payment or none at all

It’s important to keep in mind that you don’t have to put a ton of money down to get a mortgage. You will certainly be able to put down only a little bit or even nothing at all, if you qualify for such an option that is. Not everyone will be able to not put down anything for their loan, but you might be able to depending on what your credit is like. Federal Housing Administration-insured mortgages allow down payment as small as 3.5%. There are also some lenders who will accept as little as 3% of the total mortgage down.

Get a Loan with the FHA if you have bad credit

While some people might tell you that bad credit means you won’t be able to get the home loan you are after, that’s not necessarily true. The FHA or Federal Housing Administration could help you to get a mortgage despite your low credit score. The average credit score for an FHA homebuyer was about 686 in 2016.

You will need a credit score of 580 or higher to get an FHA-insured mortgage with a down payment as low as 3.5 percent, so keep that in mind. If you have a particularly low credit score and you’ve been turned down by other lenders, the FHA could be of great help.

Keep some savings in Reserve

It is highly recommended that you keep some savings in reserve, because you don’t want to deplete your entire savings account. Mortgage lenders look for applicants with cash reserves, so you will need to keep this in mind when applying. It’s always a good idea to have at least a little bit set aside just in case.

Your lender will ultimately calculate the minimum reserves you will need to qualify for a mortgage. There is a distinct possibility that the reserve requirements will require you to unexpectedly make a down payment of less than 20 percent, which in turn will force you to get mortgage insurance. Lenders always prefer that applicants have an emergency fund.

Refinance into a 15-year loan

There are a number of reasons to consider refinancing into a 15-year mortgage, including the fact that doing so will ultimately save you quite a bit of money. These mortgages tend to have lower interest rates than 30-year loans, and you will pay interest over a shorter period of time. The monthly payments on a new 15-year mortgage are typically higher than a longer one, but the interest paid over the life of the loan is far less.

Only borrow what you can afford to pack back

Make sure that you only borrow what you can afford to pay back, because otherwise you are just inviting a whole world of trouble. A lot of people make the mistake of borrowing more than they can really afford, and as a result they end up with a massive amount of debt. Take the time to go over your monthly budget as of right now to see if you can afford to make the necessary payments on time. If you determine that you cannot afford it, do not take out the loan.

Ask about a no-closing-cost Mortgage

A standard mortgage has thousands of dollars in mortgage fees and other closing costs. If you are able to pay these fees out-of-pocket, you will probably get the best possible interest rate that you qualify for. You might want to think about accepting a higher interest rate in exchange for allowing the lender to pay some or all of the closing costs though. Keep in mind that these fees can be quite substantial, so it is definitely something to at least think about.

Get a Zero-Down VA Loan

If you are a veteran, you might want to look into getting a Veterans Affairs-guaranteed mortgage. This mortgage will require you to put absolutely nothing down on the loan, which is a great benefit in and of itself. About 1/8 of all mortgages in 2016 were guaranteed by the VA, according to the Mortgage Bankers Association. This type of loan might just be able to get you the house you want without requiring you to put anything down initially. Lots of veterans get these loans each year, and it is certainly an option that you should at least consider before deciding what to do.